Monday, July 03, 2017

EU to Google: Shopping Search Must Change

Last week, Google was fined $2.7 Billion dollars by the European Union’s antitrust regulator for favoring its own shopping service over competitors in Search. According to the EU, “Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors… [which is] illegal under EU antitrust rules.”

The EU has told Google that the Company has 90 days to change how it presents search results as related to shopping or the Company will be subject to further penalty payments – of as much as 5% of its daily worldwide income!

Beyond the fact that these fines are quite large (the largest that the EU antitrust regulator has ever issued, to date) – what is the most significant impact of these fines? In other words, why should we care?

The fact that regulators are forcing Google to change how it carries out its own Search function is a huge deal. Search has been at Google’s core from the Company’s inception, and Google has been constantly refining Search to get people the most relevant information that they are looking for most quickly; Google has been morphing over time with how results are displayed (for example, paid versus organic on-page placement) and the level of specificity in the results that can be generated (i.e. via Panda, Penguin and Pigeon). And, Search still leads digital marketing efforts worldwide. Now, not only can Google be sued by other shopping sites in the EU (who can use the antitrust fine as evidence/leverage), but, more significantly, Google will have to change how it displays its shopping results. Where will the line be drawn? If consumers aren’t negatively impacted – for example, if the prices of the items Google displays in its results aren’t inflated - should an antitrust regulator really be the one to dictate how shopping search at Google functions? Also – many search engines exist. Customers can turn to Bing, or Yahoo, or Explorer if they want other alternatives. And, in terms of online shopping, Amazon and eBay are easily accessible and searchable in their own right if consumers are looking for options beyond those displayed a Google search.

It will be interesting to see how Google responds to the fine – and how their Search function for shopping changes. Also, as Google expands into new spaces within Search (like voice search), it will be fascinating to see how, if at all, their Search function will morph based on the growing presence of antitrust regulation in internet companies in the European Union.

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